Net neutrality and investment incentives

In 2005, the Federal Communications Commission (FCC) effectively removed telecommunications from the nondiscrimination requirement essential to the governance of the internet. Internet Service Providers (ISPs) now want to provide multitier internet service and price discriminate, which has induced a coalition of content providers to argue for the nondiscrimination principle of net neutrality. The issue concerns the claim is that net neutrality stifles innovation and investment incentive for ISPs. While social welfare is higher under the discriminatory regime, capacity expansion also decreases the sale price of the priority right. The predictable relationship between net neutrality and investment incentives remains ambiguous.